What's next for Gannett after CEO resigns, MomsLikeMe shuttered on same day
Gannett CEO Craig Dubow, 56, is retiring because of continuing medical problems and will be succeeded by Chief Operating Officer Gracia Martore, the company announced last week.
Health concerns and "spending more time with my family" have an honored place among the euphemisms invoked as an executive is nudged out. A push from the Gannett board could be an element in Dubow's leaving, but in this case, his severe back problems, already the occasion for a previous leave, have been all too real.
I saw Dubow last year in Washington at The Atlantic's October roundtable conference on the future of news and again in December presenting at an investors conference in New York. He walked, stood up and sat down with considerable difficulty, but hadn't lost any of his ability to make the case for Gannett. A fellow exec told me around then, "most people with that kind of pain would have quit long ago, but Craig is a very determined guy."
Dubow's succession by COO Martore was to be expected. She has run the company in Dubow's absence and they seemed to play as a team when he was at work. Martore was Gannett's investor relations exec when I started on the news business beat a decade ago, advancing in the years since to senior vice president, chief financial officer and then president and chief operating officer.
Martore, 60, has always been popular and accessible to investors and analysts so it may be tempting to read her ascent as a play to pacify Wall Street, where Gannett shares, an investor favorite for many years, has taken a beating along with other newspaper organization stocks. I'm not so sure.
Dubow's predecessor as CEO, Doug McCorkindale, after all, was a financial side guy who had directed the money part of the company during the Al Neuharth years. But he turned out to be a witty, broad-gauge and forceful CEO, hardly one-dimensional. And Martore now gets a chance to display her strategic, as well as financial, chops in an ultra-challenging environment.
On the other hand, I also see a financial flavor in the concurrent appointment of Marjorie Magner, as chairman of the Gannett board. (Dubow was also chairman; Martore will not be, at least initially). Magner, 62, was a veteran and high-ranking Citicorp executive until her resignation there in 2006 and has since run an investment firm and served on the boards of Charles Schwab, Accenture and Ally.
Gannett's announcement minimized any change of direction. But the actions of the Martore-Magner team in the next several months, to paraphrase Attorney General John Mitchell's famous line on the Nixon Administration, will be more telling than what is being said now.
The same day as Dubow's resignation, Ganett announced -- via internal memo rather than press release -- that it will be shutting down its network of 90 MomsLikeMe websites.
That may be the bigger event for the industry, since Gannett has long touted the mom websites as a digital hit -- targeted to a demographic that had lots to talk about with each other and was a good fit for advertisers of baby goods, summer camps and the like.
Instead we now learn that MomsLikeMe joins a long list of industry business-model misfires and provides fresh evidence of how hard it is for newspaper companies to scale and sustain a digital-only venture.
The shuttering is an unexpected and unfortunate event. The excellent account on Jim Hopkins' Gannett Blog points out that as recently as the 2009 annual report, issued in spring 2010, Gannett claimed the sites were a big success.
I certainly drank the Kool-Aid, citing Gannett's and other mom sites a number of times as examples of a well-targeted news/chat hybrid with a built-in advertising base.
Hopkins notes that a careful reading of this year's annual report shows MomsLikeMe traffic growth leveling off in 2010. It may have stalled further since.
- The successful initial sites had lots of local flavor. That got lost as corporate took over, expanded to roughly 90 cities and pushed national content and advertising.
- The supporting content management system was high maintenance and unreliable.
- The sites were a time drain for local news, production and advertising staffs with only middling revenue results.
- The content of the sites seemed less fresh after a while with long-winded and flaky repeat posters dominating the conversation.
The internal memo suggested a simpler cause of death, albeit in veiled terms. "While MomsLikeMe has been a good resource and gathering place, we need to support this audience in new and different ways," the note said. To me that means its demise should partly be attributed to Facebook, not anywhere near as dominant when the moms' sites were launching in the mid-2000s as it is now.
The failure of MomsLikeMe casts a sobering light on the current age of experimentation, as newspaper organizations cast about for new revenue streams to compensate for declining print advertising.
Just as the innovation experts urge, Gannett did try something new and logical, then put reasonable patience and investment into trying to make it work. But yesterday's star has quickly become 2011's has-been. It was eclipsed by a potent non-industry competitor and came up short on Web advertising revenues, which continue not to show up in the volume venturers big and small would hope.
If you are looking for a silver lining, Gannett, which no longer calls itself a newspaper company, said it would devote more resources to its news reports, digital and print. They could use some beefing up. Meanwhile, Gannett and its fellow transforming newspaper companies look to tablets, smartphones, services sold to other organizations -- or something unconventional -- to give digital revenues a surge.